Biden, Chevron’s chief of commerce sharp words on gas prices

Washington (AFP) – In a back-and-forth signal, Chevron’s chief complained on Tuesday that President Joe Biden had denigrated energy companies at a time when gasoline prices were near record levels and the president responded that the oil company’s CEO was a “moderate” sensitive. “

The president in recent weeks has criticized oil producers and refiners for maximizing profits and making “more money than God,” rather than ramping up production in response to higher prices as the economy recovers from the pandemic and feels the effects of Russia’s invasion of Ukraine.

Michael Wirth, Chevron’s chairman and CEO, emailed Biden on Tuesday saying the president’s own words were self-defeating in terms of encouraging companies to ramp up their production.

Chevron is investing in more production, writes Wirth, but “your management has largely sought to criticize, and at times discredit, our industry. These actions are not helpful for the challenges we face and are not what the American people deserve.”

The CEO of the oil company said he wanted a more cooperative relationship with the government.

“Let’s work together,” Wirth wrote. “The American people rightly expect the leaders and industry of our country to take up the challenges they face in a serious and resolute manner.”

When asked about those comments, Biden showed no empathy.

“It’s kind of sensitive,” Biden said. “I didn’t know they would hurt their feelings so quickly. Look, we need more refining capacity. The idea that they have no oil to explore and extract is simply not true.”

Gas prices average nearly $5 a gallon nationwide, putting pressure on commuters and political albatross for fellow Democrats in Biden’s midterm elections. That has left the White House scrambling for solutions, including a possible suspension of the federal gas tax of 18.4 cents per gallon, and Biden plans to make a decision by the end of the week on whether to suspend the tax, a move aimed at easing price pressures. He would need approval from a reluctant Congress.

The gas tax funds highways, but Biden said on Tuesday that any revenue loss would not have a significant impact on road construction due to last year’s trillion-dollar infrastructure law.

The standoff between the Biden administration and oil producers and refiners erupted ahead of Thursday’s meeting Energy Secretary Jennifer Granholm will have with energy companies.

Both House Speaker Nancy Pelosi and Senate Republican Leader Mitch McConnell have expressed skepticism about the benefits of suspending the gas tax. But Representative Adam Schiff, a Democrat from California, is sponsoring a bill that would suspend the gas tax until the end of 2023.

In a statement, Schiff said he is in touch with the White House to encourage the tax exemption on gas, adding, “But we shouldn’t stop there. We should also hold the major oil companies responsible for the price gouging that drove prices up in the first place.”

The House of Representatives approved legislation to combat alleged price gouging by oil companies, but the bill stalled in the Senate. Democratic proposals to impose a “windfall” tax on oil producers have generated little support in Congress.

The prospect of a gas tax exemption has drawn criticism from economists and the business community for not fixing core supply challenges.

In a speech Tuesday at the Economic Club of New York, a nonpartisan, nonprofit business group, Target CEO Brian Cornell described the gas tax holiday as a temporary “small stimulus” that does nothing to fundamentally alter the supply and demand curve for fuel and transportation.

“We have the classic supply and demand challenge,” Cornell told the audience. With all due respect, a gas holiday will only fuel demand. It does nothing to increase the supply.”

Harvard professor Jason Furman, a former chief economist in the Obama White House, said suspending the gas tax would not address supply pressures.

“Refineries are more constrained now, so supply is almost completely inelastic,” he wrote on Twitter. “Most of the 18.4 percent reduction will be taken by the industry – with maybe a few cents passed on to consumers.”

White House Press Secretary Karen Jean-Pierre told reporters that the administration is looking at as many ways as possible to provide consumers with some relief at the gas pump. But the administration does not plan to tell Americans to reduce the number of cars during the Fourth of July holiday and reduce some supply pressures.

“Americans will do what they feel is right for themselves and their family,” said Jean-Pierre. “This is not something we should judge.”

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Associated Press reporters Matthew Daly in Washington and Anne de Inocenzio in New York contributed to this report.

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